Seasonally-adjusted gross domestic product (GDP) in the OECD area rose by 0.8% in the fourth quarter of 2009, up from 0.6% in the previous quarter, according to the OECD.
Real GDP grew strongly in the United States and Japan by 1.4% and 1.1%, respectively. By contrast, GDP growth in the euro area slowed to 0.1% in the fourth quarter compared to 0.4% in the third quarter. GDP growth in France was relatively strong, at 0.6% but German GDP remained unchanged on the previous quarter and in Italy, GDP declined by 0.2%. The United Kingdom recorded positive GDP growth of 0.1% in the fourth quarter after six consecutive quarters of contraction.
Details available here.
Technorati Tags: economic-data, GDP, OECD
OECD composite leading indicators (CLIs) for December 2009 provide stronger signals of an expansionary economic outlook than last month.
CLIs for the G7 economies as well as China, India, Russia and Brazil, are now all close to, or above, their long-term trends. In all these countries, industrial production – the underlying reference series for the CLIs – has now reached its trough.
The CLI for the OECD area increased by 0.9 point in December 2009 and was 10.1 points higher than in December 2008. The CLI for the United States increased by 0.9 point in December, 9.0 points higher than a year ago. The Euro area’s CLI increased by 0.9 point in December, 12.2 points higher than a year ago. The CLI for Japan increased by 1.2 point in December, 8.1 points higher than a year ago. Full report here.
Technorati Tags: CLI, economic-data, leading indicators, OECD
Oxford Analytica critiques the OECD’s second China survey, which comes five years after the publication of its first and largely does not reflect on China’s handling of the global recession.
The OECD acknowledges major achievements. At the same time, it recognises weaknesses, many that have long been known but which come in the evolving context of China’s development into a major global economic power. These include imbalances, for example, between savings and investment; China also has capacity issues; environmental problems have come with rapid industrialisation.
…the immediate problem is how to maintain real growth in the economy while damping down the problem of asset price inflation and risk of bubbles in the property and stock markets.
- If China is to get its long-run finances in order, and balance better the way in which it funds long-term investment and growth, it needs a well functioning stock market.
- Housing policy may have scope to influence the evolution of a functioning market through planning laws, land release and the mortgage finance system.
Both these issues are extremely difficult to manage, even with the type of direct monetary controls still available in China, where the credit ‘tap’ can be adjusted relatively precisely to generate economic growth. In the short-term, in the absence of other rapid solutions, this mechanism will have to be used — and currently is being turned down to withdraw excess liquidity from the economy.
The global recovery might create enough external growth for Beijing safely to cool its asset prices. If not, instability in China will risk derailing not only its own plans, but also those of many other emerging economies that look to it as both a market for exports and an example of how to achieve sustainable high growth.
For details, see: CHINA: OECD downplays short-term drivers (Premium)
Technorati Tags: china, housing, OECD, stock market
Economic recovery continued to strengthen in November, latest OECD statistics show.
OECD composite leading indicators for November 2009 provide stronger signals of recovery than in last month’s assessment as industrial production improved.
The CLIs for all major seven countries have moved above their long-term trend, implying an expansionary outlook relative to trend.
The outlook for major non member economies also continues to point to a recovery.
The CLI for the OECD area increased by 1.0 point in November 2009 and was 8.2 points higher than in November 2008. The CLI for the United States increased by 1.0 point in November, 6.8 points higher than a year ago. The Euro area’s CLI increased by 1.1 point in November, 10.9 points higher than a year ago.
The CLI for Japan increased by 1.2 point in November, 5.4 points higher than a year ago. The CLI for the United Kingdom increased by 1.2 point in November 2009 and was 10.7 points higher than a year ago. The CLI for Canada increased by 1.0 point in November, 9.4 points higher than a year ago.
The CLI for China increased 0.2 point in November 2009, 7.6 points higher than a year ago. The CLI for India is unchanged in November and 4.3 points higher than a year ago. The CLI for Russia increased by 1.0 point in November, 3.4 points higher.
Technorati Tags: CLI, economic indicators, industrial production, OECD
Looks like the recovery is for real: another month of solid signs of improvement in OECD countries and major non-members.
OECD composite leading indicators (CLIs) for October 2009 continue to point to a recovery in OECD economies; with the CLIs for Canada, France, Italy, Germany and the United Kingdom pointing more strongly to recovery than in last month‟s assessment. Financial components (the spread of interest rates, EONIA, EURIBOR, M1) and business confidence are the main drivers to the CLI‟s performance in these countries.
All major non member economies are in a recovery phase.
The change in the outlook for China compared to last month‟s release is mainly due to a downward revision in the “Imports from Asia” component, the OECD said. To avoid confusion, it is important to note that the reference to “more strongly‟ is in the context of the likelihood of recovery rather than the strength of the recovery per se.
The CLI for the OECD area increased by 1.0 point in October 2009 and was 5.7 points higher than in October 2008. The CLI for the United States increased by 1.0 point in October, 3.9 points higher than a year ago. The Euro area’s CLI increased by 1.3 point in October, 8.8 points higher than a year ago. The CLI for Japan increased by 1.2 point in October, 2.2 points higher than a year ago. Other country data is here.
Technorati Tags: CLI, economic indicators, OECD
Guest Post by Oxford Analytica
The OECD yesterday forecast world growth of 3.4% in 2010. The OECD’s baseline forecast projects a world in which the US household savings rate is unchanged from 2009 and consumer growth picks up by 1.3%. As global trade growth recovers, some reversion to pre-crisis current account dynamics is on the cards. This reversion is only partial, and would not materialise at all under plausible alternatives to the baseline scenario.
Reversion to mean? On the back of recovering global trade, patterns of current accounts in 2010 recall pre-crisis norms:
- The US current account deteriorates by 0.4 percentage point of GDP, on the back of stronger domestic demand growth and an overall real GDP growth rate of 2.5%.
- The euro-area current account expands by half a percentage point of euro-area GDP, consistent with anaemic real GDP growth of 0.9%.
- Japan’s current account expands by 0.3 percentage point of GDP, with real GDP growth of 1.8%.
Underlying change. Three of the four ‘BRIC’ economies (Brazil, Russia, India and China) are projected to provide a larger contribution to net global demand in 2010:
- Brazil and India are projected to run larger current account deficits.
- China’s surplus is projected to shrink for the second year in a row.
The OECD’s collective current account deficit is projected to expand by 13 billion dollars (mostly on a US deterioration) while the non-OECD’s collective current account surplus (excluding the Middle East and Africa) shrinks by 96 billion dollars.
De-coupled or re-coupled?
In line with a variety of current forecasts, the OECD’s baseline scenario portrays a world in which recovering trade and demand growth is not postulated on a sharp US rebound.
This is evidence that the poorly named ‘de-coupling’ phenomenon is coming to fruition. The thesis does not posit a de-globalised world, but one in which growth in final demand is less OECD-centric. This process is at hand, with risks both to the downside and upside:
- Liquidity panic. A sharp reversal in the dollar in 2010 would test the ability of emerging markets to withstand a whipsaw of capital flows (and asset prices) arising from variable G3 risk appetites. This is test many of them are likely to pass, thanks in large part to highly liquid net foreign asset positions vis-a-vis the late-1990s reversal in capital flows.
- US rebound. A more vibrant US household sector would produce a stronger global growth outturn. This would add steam to commodity prices, not least oil. While such a result would undoubtedly feed public anxieties over monetary and fiscal stimuli and the path of inflation (especially in the euro-area), such worries would almost certainly be overdone.
Outlook. The strength of recovery in the US economy remains the key swing factor in global forecasts for 2010. A ‘double dip’ would see US growth drop back in early 2010 as consumers fail to sustain momentum in the short run, potentially halving the forecast growth rates for consumption and GDP compared with OECD figures — and keeping the US current account deficit in decline. Alternatively, consumer confidence could produce a much stronger rebound in 2010, albeit below-par, leading to deterioration in the current account.
Technorati Tags: economic-forecast, GDP, global-economy, OECD, US-economy
The improvement in the OECD’s leading economic indicators is looking like a solid trend after three straight positive months.
OECD composite leading indicators (CLIs) for July 2009 show stronger signs of recovery in most of the OECD economies. Clear signals of recovery are now visible in all major seven economies, in particular in France and Italy, as well as in China, India and Russia. The signs from Brazil, where a trough is emerging, are also more encouraging than in last month’s assessment.
The CLI for the OECD area increased by 1.5 point in July 2009 and was 1.9 point lower than in July 2008.
The CLI for the United States increased by 1.6 point in July, 4.3 points lower than a year ago. The Euro area’s CLI increased by 1.9 point in July, 1.4 point higher than a year ago. The CLI for Japan increased by 1.4 point in July, 6.6 points lower than a year ago. Full details here.
Technorati Tags: CLI, economic-data, economic-forecast, leading indicators, OECD
Analyzing the OECD’s Composite Leading Indicators, Boston Consulting Group finds that “genuine green shoots were emerging in some regions in the second quarter of 2009. However, there is nothing in the data to suggest that a strong recovery is imminent.”
BCG says the OECD’s CLIs have proven reasonably accurate in foreshadowing previous recoveries. “Outside of China, where output is already growing relatively strongly …. recovery appears more likely in the United Kingdom and parts of the eurozone.”
Strong and enduring recoveries, even in those economies displaying the “greenest shoots” would appear unlikely until the global powerhouses Japan and the United States also begin to recover.
The full analysis is available here.
Technorati Tags: CLI, economic-data, economic-forecast, leading indicators, OECD
Unemployment in OECD countries will continue to rise well into 2010, with the average jobless rate approaching 10%, up from 7.8% in April, according to new OECD projections.
More than 57 million people will be unemployed in OECD countries by the end of 2010, according to OECD estimates, up from 37.2 million at the end of 2008, when the average unemployment rate was 6.8%.
The expected increase will bring OECD-wide unemployment to 9.9% at the end of 2010, its highest level since the 1970s, with an average for the year of 9.8%.
Unemployment touched a recent low point of 5.5% in the last quarter of 2007, standing at 31.6 million at the end of that year.
Technorati Tags: economic-data, OECD, unemployment
Good news from the OECD: Major economies are getting worse more slowly:
“While it is still too early to assess whether it is a temporary or a more durable turning point, OECD composite leading indicators (CLIs) for April 2009 point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom,” the OECD says. “The signals remain tentative but they are present in the majority of the CLI component series for these countries. Compared to last month, positive signals are also emerging in Germany, Japan and the United States. However, major non-OECD economies still face deteriorating conditions, with the exception of China and India, where tentative signs of a trough have also emerged.”
Technorati Tags: canada, china, CLI, economic-data, France, Germany, Indian Pharma, Italy, japan, leading indicators, OECD, UK-economy, US-economy
